What home price can I afford?

Uber
Uber78

Go to company page Uber

Uber78
Feb 19, 2018 50 Comments

Hi everyone, I know there exists online calculators for this but I’m trying to also get some real world perspective from others in my situation. Given the comp breakdown below, what should my budget for a house be in California?

1. 420 - 450k liquid annual cash comp between wife and I.

2. 530k cash for down payment.

3. 850k-1.3m in Uber RSUs (depending on valuation) that will all vest this year. Post tax, assume half that. While this won’t be liquid till IPO, I am ok with using it as some leverage to pay more.

We currently leave in South Bay and would prefer to be around there with a relatively short commute to PA. Thanks.

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TOP 50 Comments
  • Intel
    TotalComp

    Go to company page Intel

    TotalComp
    Where the fuck is this world going to? I am amazed that educated people find it acceptable to pay millions of $ for substandard accommodation and waste away their youth to pay mortgages.
    I can tell you with 100% certainty that anyone who can easily afford to buy a house in the bay area for cash will choose to live somewhere else. Why the F do you want to become a slave of the system?
    Feb 19, 2018 11
  • Google
    Butterchkn

    Go to company page Google

    Butterchkn
    Don’t ask me how I came up with it, but if I were in your shoes, I d feel OK buying a house worth up to 1.85M. Maybe stretch to 2M if I have to for that perfect house. Below 1.85 would be comfortable. Now tell me what was your gut telling you?
    Feb 19, 2018 6
  • Ignore #3 completely. If you can't sell it, it doesn't count.
    Feb 19, 2018 0
  • Google
    pain

    Go to company page Google

    pain
    Rule of thumb is your mortgage (including other house payments like HOA, insurance) cannot exceed 36% of your monthly gross and all debt(car, credit cards or any other) cannot exceed 42% of your monthly gross. Monthly gross is yearly gross/12.
    Feb 19, 2018 7
    • Google
      PRuY13

      Go to company page Google

      PRuY13
      Personally I don't think these rules of thumb are very helpful since there are many important factors that vary widely between people: income, existing savings, down payment, mortgage requirements, tax situation, children & family, lifestyle, goals, and other financial obligations. For some people spending well over 50% on housing could be totally reasonable (because there's still plenty of money left over). Other people should spend less or not buy a house at all.
      Feb 19, 2018
    • Google
      pain

      Go to company page Google

      pain
      Well this is the upper limit. What people would prefer to spend obviously depends on individual preferences. But it can't exceed this.
      Feb 19, 2018
  • VMware
    Kim Long

    Go to company page VMware

    Kim Long
    Paycheckcity.com says take home pay for married income of $500K with $37K in 401k deductions and $50K in espp deductions is 260K. So at 25 percent of net $5K a month is available for principal interest, taxes, insurance. Keep in mind that utilities for a house in California are outrageous. I turn off the heat in the winter and don't use the AC in the summer except when the temps are over 90, and my bills are $100 a month for a 1200 square foot home.

    700K for down payment (reserve 100K for closing costs, unexpected first year home ownership expenses, emergency fund)

    $3500 a month for a mortgage payment at 4 percent or so for $700k Loan. 1500 for taxes and insurance.

    So a 1.4M dollar house. Only bid on properties listing for under 1.2M.

    At your income levels you could go higher, especially if you sell espp as soon as the shares vest, but consider what will happen if:

    - you get divorced
    - one of you loses you your job
    - one of you gets sick.

    With your high down payment, worst case you can quickly sell the house to avoid foreclosure. If that is a risk you can handle, go for it.
    Feb 19, 2018 0